Sydney-listed energy group Challenger Energy says it is encouraged by recent indications of a “growing appreci-ation of the importance” of South Africa’s nascent shale gas industry and its potential beneficial impact on the broader economy, adding that momentum continues to build towards the determination of applications for shale gas exploration.

The oil and gas explorer con-tinued to remain involved in industry consultation regarding proposed amendments to key legislation, specifically the draft Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill, having last year made submissions to government’s Mineral Resources Portfolio Committee.

It noted in its 2014 annual report that certain of the pro-posed new terms of the Bill, which was now with President Jacob Zuma for assent, had raised concerns within the oil and gas industry.

“We understand that Mineral Resources Minister Ngoako Ramatlhodi has asked the President not to sign the current Bill until it can be properly reviewed.

The potential outcomes of this may include either specific provisions for oil and gas, amendments to the legislation or accompanying regulation. This is an encouraging development that should be positive for our industry, and which we fully support,” it noted.

While the group acknowledged the likelihood that “some time” would be required for the proposed amendments to be revisited, it believed the potential benefits of clearer and more appropriate terms for the industry were likely to outweigh this.

“Additional time taken at this stage could well prove worthwhile in the medium to long term, setting the foundations for a new industry and saving time and money overall,” it noted in its results statement for the year ended June 30.

South Africa’s Karoo basin had become the focus of intense interest in the past few years, following the initial application in February 2009 to explore for shale gas in the basin by oil and gas explorer Bundu – acquired by Challenger in April 2010.

Challenger, through Bundu, remained the only junior com-pany with interests in the basin, alongside energy majors Shell and Chevron.

The group believed the coun- try’s low economic growth rates and power crisis continued to provide strong motivation for government to “urgently” pursue potential shale gas resources as a catalyst to transform the economy, which was underscored by recent announcements from energy utility Eskom of further constraints on large power users to avoid power blackouts.

Alongside the impending legis-lation, it noted that key policy instruments related to shale gas exploration included the National Development Plan (NDP), the Gas Utilisation Master Plan, the Integrated Energy Plan and the Integrated Resource Plan.

The NDP indicated the need to enable exploration for coal-seam and shale gas, incorporate a greater share of gas in South Africa’s energy mix, lower carbon
emissions and ensure that 90% of the population had grid access by 2030.